New Zealand turns the corner on three year old cost of living crisis

“Finally, New Zealand has turned the corner on the three year old cost-of-living crisis. With the new Government spending carefully, like business and households have had to, pressure has come off inflation and interest rates. Less Government spending means less pressure on inflation, means less pressure on interest rates, and means relief for households and businesses,” says ACT Leader David Seymour.

“The 3.3 per cent inflation data last month was the first sign the fiscal restraint is working. Lower inflation expectations, released last week, were more news we’re headed in the right direction. Today’s OCR cut, the first in four-and-a-half years, is more good news for struggling households and businesses.

“An interest rate cut is more powerful than any tax cut, and that’s why it's critical the Government keeps its eye on the prize of careful spending. ACT believes it's critical the Government keeps spending wisely to reduce waste wherever possible, and it will be doubly important while the economy and Government revenue are soft.

“Families with home loans will get to keep more of what they earn, to pay for groceries, or things that bring them joy. A rate cut will also ease pressure on rents, because landlord have mortgages too.

“Of course, it’s still going to be tough out there. That’s why it’s so important the Government continues to wind back wasteful spending and give the Reserve Bank confidence to cut rates further.”